10 Bookkeeping Best Practices to Achieve Success - Part Two

Owning a small business means balancing your company's revenue with everyday expenses. Keeping books on your revenue and expenses is critical because it's the only way to pinpoint exactly how much money you make and spend. Early on, this can be difficult. Creating a consistent bookkeeping practice takes time; it's hard to find the time to both run your business and track your finances if this is your first rodeo. However, building a healthy bookkeeping habit can not only make you more financially responsible but can also save you a bundle. Here are the other five practices to incorporate in your accounting plan when you're running your small business.


10 Bookkeeping Best Practices to Achieve Success - Part Two


6 - Optimize Your Chart of Accounts


Your chart of accounts (COA) is the list of all your business account numbers and their corresponding descriptions. How you set up your COA will affect the ease of your bookkeeping. A good chart of accounts will help you differentiate between a variety of income and expenses.


7 - Diligently Manage Your Accounts Payable and Receivable


Accounts payable and receivables are the two sides of your business's balance sheet. Accurate bookkeeping means diligently managing these accounts, so you don't build up unpaid balances or pay invoices twice. This can be done by making sure your bookkeeper has a thorough understanding of your accounts payable and receivable terms.


8 - Download Banking Transactions Regularly


Banking transactions are the bread and butter of your bookkeeping. Downloading your transactions regularly will save you a lot of time. There are a variety of programs that can download your transactions for you. One online banking program I've found that does this is Intuit Quickbooks Online. It even allows you to create your own categories for your transactions.


9 - Plan for Taxes Throughout the Year


Taxes are a necessary evil, but they don't have to be a pain. As a business owner, you are responsible for paying taxes on your income. It's important to take advantage of the tax benefits available to you. You can do this is by organizing tax deductions and planning your year, so you don't pay more than necessary.


Knowing how much money you'll owe in taxes isn't always easy. You won't be able to accurately predict this until you know your business' final numbers. In order to do this, you'll need to spend time planning for taxes throughout the year.


10 - Speak with a Bookkeeping Consultant Regularly


You don't need to be an accountant to be a successful business owner. However, it's important to take advantage of the many services and solutions available to you. A bookkeeping consultant is an individual that can provide you with additional insight and perspective on your finances. They can help you save time and money.


Conclusion


Business success means doing more than just having a solid product or service to offer. Thriving as a business owner also means creating and sustaining a healthy bookkeeping practice. It will take some time to figure out what practices will work for you and your business. Focusing on these ten best practices will help you get started on a path to healthy bookkeeping and business success.


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